Issuer Flash: RATCH Group PCL

Report date: 2026-09-03 Event date: 2026-08-13 Event title: Q2 2026 Results

1. Flash Conclusion

RATCH Group Public Company Limited's Q2/2026 financial statements and MD&A provide a mixed but broadly credit-neutral update to the May 2026 issuer summary and Q1 flash. Q2 EBITDA increased to THB3.868bn and profit attributable to owners to THB1.400bn from THB1.228bn in Q1, reflecting higher dispatch and profit sharing from Hin Kong Power (HKP), Paiton Energy (PE), Hongsa Power (HPC) and the SPP plants. This supports the post-RG-thermal-PPA earnings transition.

However, H1 EBITDA was only 1.1% above 6M/2025 at THB7.620bn, while profit attributable to owners declined 19.8% to THB2.628bn and normal profit declined 17.4% to THB2.744bn. HKP's consolidation from October 2025 also affects the year-on-year comparison. RATCH remains a government-related Thai power investment credit supported by its EGAT relationship, contracted assets and market access, not one whose credit quality follows a single quarter's revenue growth.

The reported consolidated position showed liquidity headroom: cash and cash equivalents were THB13.291bn at 30 June, unused facilities totalled THB4.985bn and USD608.5mn, and the THB3.5bn green debenture issued in April supported refinancing capacity. The reviewed material does not establish freely available parent-level liquidity or parent-level maturity coverage, however. Total liabilities increased slightly from year-end to THB131.235bn, the quarterly statements show material short-term funding and project-level obligations, and RH International entered into a USD250mn facility after the reporting date with RATCH as guarantor. Parent creditors should continue to focus on actual cash upstreaming from associates and JVs, refinancing and guarantee exposure, rather than treating EGAT support expectations as an explicit guarantee.

2. Results and Operating Drivers

RATCH released reviewed condensed interim financial statements and an MD&A for the three- and six-month periods ended 30 June 2026 on 13 August 2026. KPMG Phoomchai Audit Ltd. reviewed the interim statements. Sequential dispatch-related earnings recovered, but the legacy RG PPA expiry and Paiton sell-down reduced the year-on-year base.

Source: RATCH Financial Report and MD&A Q2/2026. Figures are consolidated except profit attributable to owners and normal profit as identified by management.

Management attributes the sequential improvement to higher PE and HPC generation/profit sharing after prior-quarter maintenance, and higher EGAT and industrial-user dispatch at SPP plants. Q2 revenue was 6.6% lower year on year, mainly because the RG thermal PPA ended on 30 October 2025. Baht appreciation also reduced HPC profit sharing, while PE contribution fell after RATCH's interest was reduced to 31.26% from 36.26%.

The 28.75MW Nava Nakorn Electricity Generating Expansion Project started operation on 1 April 2026. Its 25-year firm-SPP PPA covers 90MW sold to EGAT, with other electricity and steam supplied to industrial users. It adds contracted capacity but is small relative to the group. Song Giang 1 hydro, NPSI solar and the M6 motorway project remain future, rather than current, cash-flow support.

3. Credit Read-Through

Q2 is a second data point that HKP, PE, HPC and domestic SPP assets can support earnings after the RG thermal units ceased sales. HKP raises the weight of long-term domestic PPA assets in reported revenue, while PE and HPC provide equity-method earnings. Yet earnings also reflect FX and project-specific dispatch, and the lower H1 owner and normal profit means that a full, through-cycle replacement for RG remains unproven.

The financial position remains structurally complex. At 30 June 2026, assets were THB245.655bn, equity THB114.421bn and liabilities THB131.235bn, up THB0.877bn from year-end. The April THB3.5bn green debenture increased debentures, partly offset by a THB3.797bn reduction in bank loans. H1 operating and investing cash inflows were THB4.902bn and THB1.918bn, while net financing cash outflow was THB8.031bn. The latter includes THB6.501bn of net bank-loan repayments, THB2.156bn of interest and THB1.739bn of owner dividends, partly offset by the green-debenture proceeds and short-term borrowing movements. Cash ended at THB13.291bn, down THB0.962bn from year-end.

The green debenture and reported unused facilities demonstrate external-liquidity access, while operating cash flow and investment dividends can support funding. H1 dividends received were THB1.954bn, but their recurring availability and amount available to the parent must be monitored separately from equity-method profit. The balance sheet also includes THB12.744bn of short-term bank loans, THB13.330bn of current long-term bank loans and THB3.074bn of current debentures. Reported unused facilities are not unencumbered parent liquidity: project debt, pledged shares, guarantees and associate/JV structures can constrain cash. Letters of guarantee and standby letters of credit totalled THB4.770bn on a consolidated basis.

The post-period facility reinforces this caution. On 13 August 2026, RH International (Singapore), an indirect subsidiary, and RATCH as guarantor executed a USD250mn facility agreement for working capital, refinancing borrowings and/or investment projects. The financial statements do not disclose the detailed covenant package, drawdown, maturity profile or resulting cash use. It is therefore evidence of financing flexibility, not evidence that leverage or contingent support risk has been resolved.

The distinction between RATCH and EGAT is unchanged. Long-term PPAs and EGAT's shareholding remain major credit supports, but neither the interim results nor the new facility provide confirmation of an EGAT or Thai-government legal guarantee for RATCH obligations. For bondholders, the appropriate reading is that contracted assets and support expectations cushion the transition, while refinancing, cash upstreaming and investment discipline remain the primary downside channels.

4. What To Watch Next

• Confirm whether H2 results sustain the improved dispatch and profit sharing at HKP, PE and HPC, and whether they offset the expired RG thermal PPAs on a recurring basis.
• Track actual dividends and cash receipts from PE, HPC, hydropower assets and other associates/JVs, especially after the Paiton sell-down reduced RATCH's PE interest to 31.26%.
• Check RH International's USD250mn facility: drawdown, maturity, covenants, use of proceeds, guarantees and any effect on parent liquidity or refinancing needs.
• Monitor cash, short-term maturities, debenture refinancing, undrawn facilities, interest costs, collateral and letters of credit after the April green debenture and the 2026 dividend payments.
• Reconfirm the PPA and operating outlook for the remaining Ratchaburi combined-cycle assets, whose contractual end date in 2027 remains a material medium-term replacement issue.

5. Unverified / Pending

• Individual debenture documentation, change-of-control and cross-default provisions, covenant thresholds, maturity ladders and live market spreads were not reviewed.
• The Q2 sources do not confirm detailed Paiton PPA protections, dividend restrictions, tariff and fuel pass-through arrangements, or government-payment support. These remain summary-scope issues for the existing Paiton additional discussion.
• The detailed terms and use of the RH International USD250mn facility, including any parent-contingent exposure beyond the disclosed guarantee, remain unconfirmed.

6. Sources

• RATCH Group Public Company Limited, Financial Report Q2/2026, dated 13 August 2026, accessed 3 September 2026. URL: https://ratch.listedcompany.com/misc/financials/20260814-ratch-fs-2q2026-en.pdf. Used for reviewed interim financial statements, cash flow, debt, liquidity facilities, commitments, collateral and post-period financing.
• RATCH Group Public Company Limited, Management Discussion and Analysis Q2/2026, dated 13 August 2026, accessed 3 September 2026. URL: https://ratch.listedcompany.com/misc/mdna/20260814-ratch-mdna-2q2026-en.pdf. Used for operating drivers, EBITDA, profit, project developments and management's financial-position explanation.
• RATCH official Financial Statements and MD&A download pages, accessed 3 September 2026. URLs: https://www.ratch.co.th/en/investor-relations/downloads/financial-statements and https://www.ratch.co.th/en/investor-relations/downloads/mdna. Used to confirm the official Q2/2026 materials and download routes.
• RATCH Group PCL issuer summary dated 13 May 2026 and issuer flash for Q1/2026 results dated 18 May 2026, internal current baseline reports.